Informative Social Interactions
Hector Calvo Pardo (),
Chryssi Giannitsarou () and
Luc Arrondel ()
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Michael Haliassos: Goethe University Frankfurt
No 636, 2016 Meeting Papers from Society for Economic Dynamics
We design, field and exploit novel survey data, from a representative sample of the French population in December 2014 and May 2015, that provide insights regarding two channels via which social interactions may generally affect financial decisions. The first is a pure information effect, which arises solely from communicating and disseminating information to and from friends and acquaintances. The second is an imitation effect, broadly understood as comprising of social norm effects, complementarities, fads, etc. We find that both effects are positive, sizeable and significant. The more (and better) informed about the stock market members of respondents' social circles are, the higher the share of respondents' financial wealth that is invested in the stock market (information), in accordance with theoretical predictions. The same effect is found for more members of respondents' circles participating in the stock market (imitation). In the latter case however, we only find evidence of selective imitation, by identifying a positive and significant effect coming only from a subset of respondents' social circle with whom respondents interact regarding financial matters. These findings suggest that both directly and indirectly informative social interactions are important for financial behavior and stock market participation.
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Working Paper: Informative Social Interactions (2020)
Working Paper: Informative Social Interactions (2019)
Working Paper: Informative social interactions (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed016:636
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